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Sunday, 24 June 2012

The Entertainer

We saw Jimmy Carr many years ago in a small, seedy comedy club above our local pub in Walthamstow, East London. He was by far the smartest, funniest and cruelest comic that night. So we weren't surprised when he started appearing on the TV. In fact I felt rather proud that I knew him before he was discovered.

I didn't realise being quite funny could be so lucrative. If the reports are correct he's been avoiding tax on around £3 million a year. And according to our Prime Minister that's not on - avoiding tax that is.

Predictably, Jimmy has come in for some stick. The general feeling appears to be that he's being greedy; even if he paid 50% on his earning he'd still be taking home well over a million a year - surely enough to keep the wolf from the door. It doesn't help that there are more and more of his fellow citizens finding themselves having to manage on less and less as jobs go and benefits get cut.

Yet, it's not as straight forward as the early news headlines made out. Honestly, I'm not sure that I'd ignore the advice of my accountant if he told me that I could legally avoid paying a lot of tax. Rationally, I should accept his advice, otherwise why bother going to him in the first place.

Apparently J K Rowling and James Dyson don't use major tax avoidance schemes, J.K. feels she should pay an appropriate level of tax, because when she was struggling she lived on benefits - without taxes there would have been none. I don't know the reason Dyson pays more than he needs to, but I'm sure his motives are honourable.

But it surely can't come down to one's personal preference what the level of tax you should pay. The thing is, if you earn a lot of money there are ways in which you can manage your tax liability. Especially if you're a business. If you're in the majority, paying tax through PAYE, you have little or no opportunity to reduce your tax bill by legitimate means.

There's surely an unfairness there. But it's less to do with Jimmy Carr's "greed" or J.K. Rowling sense of gratitude; more about a crap taxation system and inadequate policing.

We laugh at the Greeks, for whom paying taxes is a mug's game; especially if you're well off. We don't seem to be much better.

But then the political classes don't seem that interested in curbing the excesses of their friends and social equals. Heavens above, didn't the Labour government give the doctors a pay award which was beyond the wildest dream of the greediest of GPs.

How can you expect any county town GP retire on anything less than £45k a year. It's criminal. No, leave Jimmy Carr alone. Rage at the hollow men that mumble nothings and strut across the world stage like puffed up clowns. Spit out your fear and frustration into the faces of the political classes who have grabbed the high ground and watch the rest of us drown in the flood waters of their ineptitude, incompetence and insensibility.


Steve said...

Companies too must work hard to pay less tax than they need to... media companies among them. I wonder if anyone has investigated the tax arrangements of the newspapers that broke this story in the first place?

Marginalia said...

Steve, it gets quite complicated. If, as an employee or shareholder, would you be content if your company paid more tax than they needed to (legally of course) and you took a lower salary or dividend?

It's not how people use the rules it's the rules themselves that are the problem.

Socrates said...

The old chestnut - what's the difference between law and morality?

Jimmy Carr was not breaking the law (apparently). But was he acting immorally by leaving it to others much much poorer than him to pay for the roads, hospitals, schools, pensions etc which everyone uses? There is no right or wrong answer here - it probably turns on your political perspective: nasty grabbing state or kind re-distributive state? What we do know is that no matter which political party is in power (fascists apart) tax avoidance as opposed to tax evasion will be an issue as long as clever tax accountants are inventing dastardly schemes. We all like to put aside money for a rainy day but some people work on the Noah principle!

Marginalia said...

Knew I could rely on you to come up with some sense, old Socco.

Now there's a thought - a tax break for growers of sweet chestnuts. I'd support that. Lovely trees, great fruit and timber.

The more money you have the better you're treated. Everyday things. If you have a nice deposit and a steady income you can get a mortgage and a good interest rate. If not you pay through the nose. Some would say that economics, the way things are naturally. Others say it unfair that people should be excluded from owning a home because they're our and penalised.